John Lewis Partnership has paid out a staff bonus for the first time in four years after its turnaround strategy produced a year of higher sales and growth in underlying profits.
Chairman Jason Tarry said the group’s multi-year plan to invest in customers and its brands was working, with shopper numbers increasing and record satisfaction scores.
Partnership sales rose 5% to £13.4bn in the 53 weeks to 31 January 2026, while pre-tax profits before the staff bonus and exceptional costs increased 6% to £134m.
Operating cashflow climbed £63m to £595m in the year, supporting increasing investment in the business and staff pay.
JLP also brought back its staff bonus payment for the first time since 2022, with a dividend of 2%.
The group said disciplined financial management in recent years, combined with improving cash generation, good liquidity and low levels of external borrowings, enabled the return of the much-missed partnership bonus, which is equivalent to an extra week’s pay for all staff.
However, the group’s bottom line was held back by a £53m hit from new taxes, including £13m from the extended producer responsibility (EPR) packaging levy and £40m from higher National Insurance contributions. The retailer was also forced to promote more aggressively to attract cautious consumers, especially in the run-up to Christmas.
JLP also swallowed exceptional costs of £120m during the year as it modernised technology and wrote down the value of legacy systems. It meant the group posted a pre-tax loss for the year of £21m, compared with a profit of £97m in FY25.
Waitrose recorded growth of 7% in the year as sales reached £8.5bn on the back of a 3% rise in volumes after it attracted 5% more shoppers through its doors than two years ago.
Adjusted operating profit was up £29m to £256m at the supermarket and operating margin improved 16 basis points to 3.2%.
John Lewis sales increased 3% to £4.9bn, while operating profits rose £13m to £58m.
“Despite a subdued market, a challenging lead into the crucial peak period and increased taxes, we took the decision to continue investing in the business, and have delivered cash and profit growth,” Tarry said.
“There is much still to do, but our growing cash generation and strong balance sheet enable us to invest more in our brands and our partners to improve the experience for our customers. I’m really grateful for the commitment and passion our partners bring and, alongside our continued investment in partner pay, we’re pleased to be in a position to award a 2% partnership bonus. We remain on track to make further progress this year.”
JLP added the group remained cautious in its outlook for the year ahead, but said it was well positioned to navigate the challenging macroeconomic environment.
“We are confident in making further steps forward in the year ahead as we progress our multi-year transformation,” the group said.
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